A few days ago, IKEA Shanghai Yangpu Mall and Alibaba's Homearch Chongqing store successively announced that they would close their stores in July, which immediately attracted widespread attention in the industry. The topic of "IKEA Shanghai Yangpu Mall will close in early July" was even more controversial. It was trending on Weibo.
It is reported that IKEA Shanghai Yangpu Mall has only been open for more than two years and is the second IKEA mall to close in the Chinese market this year. On April 1 this year, IKEA closed its Guiyang mall and announced it would focus on online channels. Regarding the reasons for the closure of IKEA Shanghai Yangpu Mall, IKEA China stated that in the face of an increasingly complex retail market and changes in consumer behavior brought about by factors such as digitalization and the epidemic, IKEA China will transform, close or add new business units when necessary. and channels, and explore various innovative customer touchpoint models.
In addition, Alibaba's selected home furnishing brand homearch Chongqing Xingguang 68 Plaza store also announced that it will officially cease operations from July 15, 2022. It is understood that this store is Homearch’s first store in the country. It was launched in late December 2021 and has only been open for half a year. It is worth mentioning that in March, there was news that Homearch’s first store in East China would be launched at Nanjing Golden Elephant City Shopping Center this year. However, because the overall opening of the shopping mall was postponed to August, it was also postponed accordingly. Some industry insiders speculate that after Alibaba’s “business adjustment”, the plan for the first store in East China may be “frozen”.
In recent years, especially since the outbreak of the COVID-19 epidemic, there has been an obvious trend of online home products, and e-commerce sales have developed rapidly. At the same time, with the rapid development of Internet home decoration customization, the entry rate of offline home building materials stores is getting lower and lower, and the natural customer flow There has been a serious decline and operating pressure is increasing day by day. In order to reduce operating pressure, many home building materials stores chose to increase rents last year, which even triggered disputes and conflicts with merchants.
High rents and the deteriorating market environment have caused many home furnishing stores to have higher and higher rent-out rates and losses year after year. Many of them eventually closed down because of this. According to incomplete statistics, since last year, at least 34 home furnishing stores and building materials markets have been closed, demolished, or relocated across the country.
Alibaba’s Homearch Chongqing store will cease operations on July 15 this year, and it has only been open for half a year. The store spans three floors with a total construction area of 6,000 square meters. The store displays more than 100 brands and more than 10,000 household products.
IKEA Shanghai Yangpu Mall will close in early July this year. It has only been opened for two years, with a total area of about 8,500 square meters. It is IKEA's first small mall in China.
IKEA GuiyangThe mall was closed on April 1 this year. The mall opened in October 2019, with an overall business area of approximately 33,000 square meters, offering more than 9,000 types of furniture and household items, and 48 home furnishing exhibition rooms.
Xi'an Daming Palace Building Materials and Home Furnishing Wholesale Base Market was demolished in April this year. The market covers an area of 2,200 acres and has a total construction area of 1 million square meters. It is the largest retail and wholesale base for building materials and home products in the northwest region. At present, the demolition and removal work of the Daming Palace Ceramics District and the Lamps District has been completed. The Ceramics District involves 275 households and 388 merchants, and the Lamp City covers an area of 10.29 acres and involves 124 merchants. It is understood that the market will be relocated to Gaoling Smart Home Headquarters Base, a key construction project in Xi'an in 2022.
The Xiaoshan Huiyu Furniture and Home Decoration Market has ceased operations on March 1 this year. The market was founded in 2005, with a total construction area of 80,000 square meters, hundreds of home furnishing brands, and about 200 operating stores. It is reported that the market site will be converted into six office buildings and a 21-story hotel.
Foshan Jisheng Weibang Green Island Lake Shopping Mall has officially ceased operations on August 31, 2021. The store opened in December 2017, with a total area of approximately 60,000 square meters. It is the first shopping mall named "Jisheng Weibang" under the Red Star Macalline Group. Its merchants revealed that they have made almost no money since entering the mall, and some merchants have been losing money for four years.
Foshan Shiwan Real Estate Ceramics Wholesale Market has been closed since August 24, 2021. The reason for closure is the expropriation of planned land by the Chancheng District Government. The market is located in the Shagang area of Foshan, Guangdong and has a history of more than 30 years. In 2015, the Shagang Ceramics Wholesale Market and the Real Estate Wholesale Market had more than 2,000 tenants in total. There are currently more than 400 ceramics-related stores registered nearby, and there are a large number of surrounding logistics, handling, property and other related supporting companies.
Shenyang Ceramics World has ceased operations on August 22, 2021. The merchants have relocated to Art Exhibition Home World. After that, the entire mall building was completely demolished. The market opened in September 2007, with a total construction area of 123,000 square meters. It was once one of the largest ceramic distribution centers in Northeast China.
Juranzhijia Zaoyang store has officially closed on August 6, 2021 and ceased operations. According to reports, the store suffered serious operating losses before closing. The sudden announcement of the store closure had a huge impact on the business operations of the merchants. Many merchants also suffered heavy losses as a result, and some stores were still under renovation and had not yet opened for business.
The demolition work of Jinhua Building Materials Market in Jincheng, Shanxi Province was completed in July 2021. The market covers an area of 7000㎡, with a construction area of 5,200㎡. It is one of the six parcels of land within the urban reform scope of Jinhua Community. It has no planning, construction, real estate and land procedures.
The land where Jiujiang New Sanding Building Materials Market is located will be expropriated in July 2021. After demolition, the original merchants of New Sanding Building Materials Market may be relocated to the Hongda Hardware Trade City next to the bus terminal, and the land after demolition will It can be used as residential land, commercial land, primary and secondary school land, social parking lot land, protective green space, etc.
Red Star Macalline Shaoxing Second Ring Mall issued a store closure announcement in April 2021. The reason is that the "Entrusted Operation and Management Contract" has expired and will not be renewed, and the mall has also been taken over by Easy Home.
In addition, Red Star Macalline’s 2021 annual performance report shows that last year it closed 1 self-operated shopping mall and 14 commissioned shopping malls. In addition to stores in Shaoxing, Zhejiang, there are also stores in Zhoushan, Zhejiang, Dalian, Liaoning, Suqian, Jiangsu, Ganzhou, Jiangxi, Foshan, Guangdong, Xingyi, Guizhou, Xinyu, Jiangxi, Fuzhou, Fujian, Changshu, Jiangsu, Renqiu, Hebei, Handan, Hebei, and Xiangtan, Hunan. The 2021 annual performance report of Easyhome shows that 10 of its franchised home stores have also closed in 2021.
In recent years, home and building materials stores have frequently closed across the country. Who killed the home building materials store? In addition to urban upgrading projects requiring the relocation and renovation of the mid- to low-end building materials market, the fundamental reason is the changes in the current home consumption market environment: the advent of the full decoration era, the changing preferences of post-90s home improvement consumers, the nature of home consumption is low-frequency consumption, and the decline of the real estate boom , development is difficult under the epidemic, etc.
In addition, the disorderly expansion of home building materials stores leading to serious excess is also one of the reasons. Data shows that the national BHEI value in 2021 is 183.87 (located in the red light district), a record high in recent years. The overall national building materials and home furnishing market continues to be oversaturated. In 2021, the national building materials and home furnishing market area above designated size will be approximately 233.42 million square meters, with a year-on-year growth rate of 5.66%. This shows that the overall surplus situation in home building materials stores is still intensifying.
With the continuous changes in home furnishing sales channels, as a market that national brands once had to compete for, the current situation of home building materials stores has become particularly "awkward." Store traffic is not high, rents are getting higher and higher, merchants not only have fewer and fewer orders, but also face high operating expenses. Sometimes, instead of making money, they lose money. This situation has also made many home building materials dealers increasingly dissatisfied with the stores and gradually lost confidence in entering the stores.
Do you think home building materials dealers will enter the store?Is it still useful?
